With the end of the emergency salary scheme at the turn of the year and the coronavirus-led job crisis, the debt levels of Brazil’s poorest populations have hit new records. In April, 22.3 percent of those with a monthly income of BRL 2,100 (USD 384) or less were in debt — according to think tank Fundação Getulio Vargas.
That rate ties the record established in July 2016, when Brazil faced its worst economic crisis in history until that point — and a political deadlock that would lead to the impeachment of then-President Dilma Rousseff.
While indebtedness rose in all segments of Brazilian society, the trend was much harsher on the poor — who live from paycheck to paycheck and are unlikely to be able to save money.
For almost half of those in the lower income bracket, debt came as a result of a family member losing his/her job. For almost 38 percent of them, it takes an average of three months to pay off what they owe.
Meanwhile, less than 4 percent of people in the upper-income bracket are in debt.